According to the International Energy Agency (IEA), India’s yearly capital investment in the development of oilfields is projected to decrease starting next year, diminishing by approximately one-fifth by 2030 if significant discoveries are not made. The decline is expected to result in reduced domestic oil production and an increased reliance on imports. Toril Bosoni, Head, Oil Markets at IEA stated that capital expenditure on oil projects is anticipated to decrease to below $3.5 billion by 2030 from approximately $4.3 billion in 2024 based on the current pipeline of upstream projects.
Bosoni noted that while there may be discoveries and new project developments, the timeframe between discovery and production typically extends beyond 2030, as indicated by the IEA study. Although companies have expressed interest in recent exploration licensing rounds, any discoveries will require time for development, possibly extending beyond 2030.
According to IEA data, oilfield development capital expenditure increased from under $3 billion in 2021 to slightly over $4 billion in 2023. However, domestic oil production decreased to just under 7,00,000 barrels per day (bpd) in 2023 from slightly over 9,00,000 bpd in 2011. The IEA forecasts a further decline to 5,40,000 bpd by 2030, leading to increased dependence on foreign oil.
Apart from ONGC’s KG block, expected to peak at 45-50,000 bpd, there are no other significant projects in the queue with final investment decisions, according to the agency. India’s exploration licensing rounds have been dominated by state-run ONGC and Oil India, with limited participation from foreign firms. The absence of international companies may partly be attributed to lackluster discoveries since the beginning of the century, as highlighted by the IEA.
As reported by The Economic Times, the IEA emphasized that over the past 23 years, India has discovered 2,000 million barrels (mb) of commercial liquid resources, significantly lower compared to discoveries in Angola, Norway, Guyana, and Brazil, which have found 10,000mb, and 40,000 mb, respectively.
